How ‘redlining’ dashed dreams, hurt neighborhoods

By Lew Finfer
Special to the Reporter

Fifty years ago, Boston’s banks began a program with City Hall to increase homeownership for African-Americans. It was called the Boston Banks Urban Renewal Group (BBURG) and it was framed as a response to the assassination of Rev. Dr. Martin Luther King Jr. and a nod to the requirements of the Housing Act of 1968, which outlawed discrimination in home mortgages.

But the program was a disaster for parts of Dorchester and Mattapan, for the African-Americans who bought homes under the program, and for the Jews and Catholics who sold their homes. This is a good time to remember all the contingent disasters that emerged from that era and to consider the lessons they offer for today.

In the vein, a free tour/discussion on these issues will take place on Sat., June 8, at 10 a.m. A group will meet in front of Family Hardware at 1106 Blue Hill Ave. in Dorchester.

Redlining is a common practice in many American cities. In Boston, bank leaders came together and literally drew boundaries around areas of Dorchester and Mattapan where they mutually agreed to issue mortgages to African Americans in what were then-predominantly white neighborhoods. Under the scheme, African Americans could get mortgages in Dorchester and Mattapan, but not in West Roxbury, or Quincy, or Newton.

Also, the banks would only make FHA-insured mortgages. These require lower down payments than conventional mortgages, which is good. But these mortgages led to infamous “fast foreclosures.”

Another term from that era is “blockbusting.” At the height of BBURG, some 15 realtors opened offices in the vicinity of Blue Hill Avenue and Morton Street, a predominantly Jewish neighborhood adjacent to heavily Irish Catholic neighborhoods. Blockbusting realtors went door-to-door with made-up stories to scare white homeowners into selling. “See that black family moving in?” they might say. “They have eight kids and their eldest is getting out of Walpole prison soon after serving time for rape. Do you want him living across the street from your daughters?”
These stories were fiction, but they frightened some homeowners into selling, which then snowballed when people saw their neighbors pulling out. One of the realtors admitted to these practices in an article he wrote for the Metropolitan Real Estate Journal, “Confessions of a Blockbuster.”

Boston’s political and civic leaders fail to respond to the emerging crisis. The Mattapan Organization, a civic improvement group, tried to oppose these policies by challenging realtors, asking the banks to change the program, and asking political and Jewish community leaders for help. Mayor White didn’t respond. He later admitted he was focusing on running for governor in 1970.

The Boston City Council passed a measly $25 fine for blockbusting. The banks refused to reform the program. Downtown, major Jewish institutional leaders, who lived in the suburbs, suggested that the thousands of working-class Jews living in Mattapan and Dorchester move out.
There were other failures and outright illegal activity. Homes were supposed to be inspected and repaired to qualify for FHA loans. But often these inspections were not done and new black homeowners inherited homes that badly needed structural repairs.

In Boston, we organized to get a new law on the books that allowed the homeowners to file claims for the cost of repairs caused by the faulty inspections. Dorchester Community Action Council and Dorchester Fair Share organized more than 600 black homeowners to apply and get these rebates.

But it was too late for more than 1,200 homeowners who lost their homes to the “fast foreclosure” practiced by banks on FHA-insured loans. With FHA-insured loans, if the homeowners fell even one month behind due to problems like the repairs needed because of faulty inspections, the bank could foreclose, transfer the house to the federal government, and recoup all the remaining mortgage. Had the bank made a conventional mortgage — just between the bank and the homeowner — they would have been much more reluctant to foreclose and much more open to negotiation, since they were not set up to manage foreclosed property.

BBURG was not a total failure. The exact number is not known, but a couple of thousand African Americans got mortgages from this program and were never foreclosed on. Of course, the Housing Act of 1968 enabled access to such mortgages and the homeowners did have to deal with the neighborhood deterioration that BBURG caused.

Problems were compounded by mismanagement. Homes were often transferred from the banks to the federal government agency FHA/HUD, which required tenants remaining in two- and three-family homes to move out, which led to vacant buildings being vandalized, stripped of materials, and even set on fire. I know. I lived next door to one of these abandoned homes on Claybourne Street near Four Corners in Dorchester.
More than a thousand abandoned buildings plagued parts of Dorchester and Mattapan. The Dorchester Community Action Council and Dorchester Fair Share had to organize meetings with city and federal officials to get them torn down. This spread of abandonment became a new excuse for banks to redline the area by no longer making mortgage loans — because it was a deteriorated neighborhood, even though they were the ones who caused the deterioration.

There’s more on this whole story in the book “The Death of an American Jewish Community,” by former Globe editorial writer and columnist Larry Harmon and Hillel Levine.

All these events fed a false narrative that when blacks moved in, a neighborhood would soon deteriorate. Yet the truth was that intentional acts of big banks and realtors, and the lack of action and regulation by the government, caused the neighborhoods to decline. It took decades to bring back parts of Dorchester and Mattapan that this program harmed.

We learned a lot. Community groups worked with US Sen. William Proxmire of Wisconsin to get the Community Reinvestment Act (CRA) passed in 1977. It banned banks from redlining and mandated a fair share of mortgages, home improvement loans, and small-business loans in the areas that gave them deposits, as our neighborhoods did. If banks got poor grades on their CRA lending records, they could be denied approval to merge and open branches. The CRA has enabled 40 years of community groups negotiating reinvestment agreements with banks, totaling many tens of billions of dollars.

The lessons from 50 years ago are many: Big banks are very powerful and can hurt communities that give them their savings. This was repeated in the foreclosure crisis of 2007-2012. Government help is not guaranteed and can also add to the harm. Organized community groups can have an impact if they do the research, are persistent in organizing large numbers to act together, and find allies in government. And the media need to dig into these stories.

Today, community groups and neighborhoods face a tidal wave of high rents and high home prices and need to organize to prevent continued financial hardship and displacement. The final story has yet to be written.

Lew Finfer is a community organizer and co-director of Massachusetts Communities Action Network, based in Dorchester. He has been an organizer in Dorchester since 1970. If you’d like to join the walking tour on June 8, please send a message to